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TMI Blog2002 (11) TMI 650X X X X Extracts X X X X X X X X Extracts X X X X ..... s for consideration in this appeal with regard to imposition of equal amount of penalty of Rs. 2,22,745/- under Section 11AC of the Central Excise Act. 2. The Departmental officers seized 8 bags of cotton yarn on cones weighing 400 kgs valued at Rs. 43,384/- on interception of a jeep in which these goods were carried. As a follow-up action the department checked the documents and verified the st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation was not accepted and hence the amount has been appropriated in the PLA which was later entered and equal amount of penalty has been imposed under Section 11AC. The prayer of the appellant that penalty cannot be imposed and if penalty is imposed it has only commensurate to the value of 8 bags of cotton yarn seized in the jeep is required to be taken for consideration. This plea was not accept ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alty equal to the quantum of the duty. He submits that the duty liability escaped payment was only to the extent of Rs. 7,982/- on the quantum of 8 bags which was valued at Rs. 43,384/-. He submits that the mandatory penalty under Section 11AC is required to be scaled down on the basis of duty liability only on 8 bags seized from the jeep. 4. SDR opposes the prayer and contends that the total du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a specific provision for imposing penalty and that is Section 226 of CE Rules. The said rule was not invoked for imposing penalty for non-debiting the amount in PLA with regard to 242 bags of which the documentation had been completed. Therefore the authorities have committed an error in imposing penalty on the value of goods involving on 242 bags for which documentation have been done and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oked. Imposition of penalty on this quantum of goods is not justified and not legal in the light of the judgment referred to before me. Hence the order is modified. However the quantum of mandatory penalty and the quantum liable to be paid on the seized 8 bags is sustained. The duty involved is Rs. 7,982/-. The Apex Court has held in the case of State of Madhya Pradesh v. BHEL (supra) that mandato ..... X X X X Extracts X X X X X X X X Extracts X X X X
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